Advantages:

+ By protecting your income from taxes, you will have more money.
+ A vast range of financial products are offered as TFSA.

Drawbacks:

– Taking the time to undurstand the rules can be a little arduous for some peopoles.
– If you do exceed contributions, or if you make a prohibited investment (or if it becomes prohibited), you will have to pay a penalty.

*Please note that informations on this site are absolutely not financial advices. So consult a professional advisor and/or learn independantly.*

TFSA particularities:

If you have savings growing but you did not contribute to your TFSA (and RRSP), please take the time to take care of it as soon as possible, to be sure you can benefit of all the advantages entitled to you! You will save on taxes and protect your incomes.
The TFSA allows you to grow your money without paying taxes on the interest incomes of those investments. Also note that some programs for wich you could apply do not take into account the interest income portion coming from your TFSA, even if you declared it.
Please respect the contribution limits, and don’t make prohibited investments, that way you will never pay a penalty. You can find relevant informations about this on the Canadian Revenue Agency website. The amount you withdraw from your TFSA one year is added to your contribution room the next year. When needed, to benefit of better rates, you can transfer a TFSA from one financial institution to another. The latter will in some cases pay the transfer fee, you have to verify this if you do not want a bad surprise. You could also verify if interests are paid for the period of the transfer, wich can in some cases take a few weeks.

A variety of options offered:

A wide variety of financial products are offered as a TFSA. There are redeemable savings (where you can withdraw your money anytime, with lower rates), term savings, some investment products with a possible higher return because linked to the markets and ensuring your assets… Also, some mutual funds, exchange-traded funds and shares could be eligible (verify with an advisor). It is also possible to benefit of the advantages of robot advisors for your TFSA with companies like Wealthsimple. Their fees are only 0,5%, and you can have a free period with some promotions, requiring you to use a higher level of protection or refering friends. It is very simple to use, because the rebalancing of the portfolio is automatic, and transfers with your financial institutions are fast and free. Subscribe using my referal link and get 10000 managed for free, for a period of time.Invest with Wealthsimple

To invest in funds, you can go with your financial institution’s broker or an independant one. If you are enough independant, you can use an online platform to make your investments. Many financial institutions offer that kind of online platform. There can be fees related to transactions, also note that a certain type of transaction can be free. For example, with Disnat (from Desjardins), you don’t pay for the mutual funds transactions. With Banque Nationale, you don’t pay for exchange-traded funds transactions. A basic subscription can also be free under certain conditions.

Before you begin…

You have to ask yourself if you want to have access to your money anytime, or either what term could be suitable for your situation, etc. Perhaps that spreading different terms could be convenient. You have also to consider the minimum amounts required to invest, and for riskier investments, think about distributing the risk (ex. two different investments instead of a single one). An adviser will be able to help you, if needed. (But the adviser from your financial institution will not send you to a competitor even if it could be better for your money…) On the other hand, having investments in multiple financial institutions and transfering TFSA between institutions is suitable for more organised and autonomous persons. You have to search for useful informations, ask the right questions, etc.

TFSA or RRSP?

Your accountant or adviser could help you in those choices. But note that it is always possible to withdraw from your TFSA to subscribe eventually to an RRSP. In fact, the RRSP offers very different benefits than those of the TFSA, and this article is more about the TFSA. Roughly speaking, the RRSP allows you to postpone your income’s taxes, unlike the TFSA wich allows you to save on your interest income’s taxes. The amount of money that you will withdraw from the RRSP will be taxed the year of the withdraw instead of being taxed the year you receive and deposit there your salary income. Note that if you receive a compensation replacing a salary wich is pre-taxed (ex. SAAQ), you don’t want to pay taxes twice.

With your Orange Key, you can receive a money bonus when a friend you invited open an account (new client) with your key and make a deposit of 100$ minimum. You can obtain a money bonus if you open an account with Tangerine and use my orange key, after you deposit your first 100$.

Calculation example estimating the rate including Desjardins dividends.
The last dividend rate for the interests was 12,6%. We can calculate with this rate, but it will be different. 1,8% + (12,6% * 1,8%) = 2,0268%

Withdraw in few years (ex. 5 years),
guaranteed capital, variable rate,
with a minimum rate guaranteed: